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Sen. Warren to file bill targeting top drug companies

Bill would help fund basic medical research by targeting pharmaceutical companies accused of breaking the law

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Updated: 9:05 PM EST Jan 22, 2015

Sen. Warren to file bill targeting top drug companies

Bill would help fund basic medical research by targeting pharmaceutical companies accused of breaking the law

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Updated: 9:05 PM EST Jan 22, 2015

BOSTON —

U.S. Sen. Elizabeth Warren is shifting her focus from Wall Street to the nation's top pharmaceutical companies.

The Massachusetts Democrat plans to file a bill next week that she said would help fund basic medical research by targeting pharmaceutical companies accused of breaking the law.

Warren's bill would require that whenever drug companies enter into a settlement with the government over alleged wrongdoing, they must pay a portion of their annual profits over five years to support research at the National Institutes of Health and the Food and Drug Administration.

She said budget cuts to both agencies have choked off support for research that could lead to breakthrough treatments against cancer, heart disease, Alzheimer's disease, Ebola, autism and other conditions that affect millions in the United States and around the globe.

Warren said many of the biggest pharmaceutical companies have relied on taxpayer-funded basic research to help develop what she described as blockbuster drugs.

"Drug companies make great contributions, but so do taxpayers. In other words, we built those medical innovations together," Warren said Thursday at a Washington, D.C., conference sponsored by Families USA, a health care advocacy group.

"Put simply, the astonishing scientific and financial successes of the pharmaceutical industry have been built on a foundation of taxpayer investment," she added.

Public funding for basic research on conditions such as high cholesterol, diabetes and asthma has dried up at the same time that blockbuster drugs treating them have generated large profits for pharmaceutical companies, Warren said. She said the NIH budget over the last decade hasn't kept up with the pace of inflation.

That translates into fewer researchers doing the labor-intensive work needed to spur the creation of breakthrough drugs, Warren said. Without funding for that kind of research, she said, the nation risks losing a generation of young scientists.

Robert Zirkelbach, a senior vice president for the industry group Pharmaceutical Research and Manufacturers of America, said Warren's proposal would result in fewer medicines for patients.

Zirkelbach said the industry supports sufficient federal funding for the NIH and acknowledges that the agency plays a vital role in basic research. But he also said that in 2013, pharmaceutical companies invested $50 billion into the research and development of new drugs.

"Pursuing misguided policies that siphon funding from the groundbreaking medical research happening in the biopharmaceutical industry will have devastating consequences for patients and society," Zirkelbach said in a statement.

Warren said under her bill, a pharmaceutical company that enters into a settlement with the government over alleged wrongdoing would have to set aside 1 percent of their annual profits for each of its blockbuster drugs that can be traced to government research support.

That money, over five years, would be used to support research at the NIH and the FDA.

Warren said the penalty would only apply to the biggest companies, with annual sales over $1 billion on blockbuster drugs.

"This isn't a tax. It is simply a condition of settling to avoid a trial in a major case of wrongdoing," Warren said. "If a company never breaks the law, it will never pay the fee. If an accused company goes to trial instead of settling out of court, it'll never pay the fee."

Warren said if the policy had been in effect during the past five years, NIH would have had about $6 billion more annually to fund thousands of new grants to scientists and universities and research centers. She said that would have been the equivalent of nearly a 20 percent increase in NIH funding.

Warren acknowledges her proposal faces a tough slog in a deeply divided Congress, where she is in the minority party.

The proposal would also be a boon for Massachusetts, which would likely benefit from any increase in funding for research.